The tax agency said late Thursday that it's putting the deal on hold "as a precautionary step".
"During this suspension, the IRS will continue its review of Equifax systems and security", the agency said in a statement.
Atlanta-based Equifax said its systems were not compromised by the incident on Thursday, which involved bogus pop-up windows on the web page that could trick visitors into installing software that automatically displays advertising material.
Equifax has been under intense scrutiny since disclosing last month it suffered a massive hack that may have exposed personal information for roughly half the U.S. population. "It is surprising that the IRS would choose to do so given its legal obligations to protect Americans' privacy".
Last week we brought news that the Internal Revenue Service awarded a $7.2 million contract to Equifax to allow Equifax to "verify taxpayer identity".
Still, the IRS said it made a decision to temporarily suspended its short-term contract with Equifax for identity-proofing services. "Yes, it froze the contract, but "there is still no indication of any compromise of the limited IRS data shared" with Equifax".
An Equifax spokesperson said that the company is working with IRS officials "to review the facts and clarify available options".
Tribiano last week said that the IRS either had to shutter the Secure Access service or grant Equifax a so-called "bridge contract" to give the Government Accountability Office (GAO) time to investigate Equifax's protest. Sign ups for Secure Access accounts have been suspended as a result, but anybody who already has one will not be affected.
The contract suspension will prevent taxpayers from creating new accounts through the IRS's "Secure Access" program that provides access to transcripts and records. Equifax had a previous contract with the IRS that expired on September 30th, in the midst of the data breach fallout.
In 2016, government services made up 5 percent of Equifax's overall $3.1 billion in revenue, accounting for 10 percent of its workforce solutions revenues, 3 percent of its USA information solutions revenues, and 7 percent of its global revenues, according to a regulatory financial filing.